William G. Currie – Executive Chairman Mike Glenn – Chief Executive Officer and President Michael R. Cole – Chief Financial Officer

Steve Chercover– D. A. Davidson & Co. Jay McCanless – FTN Midwest Securities Corp. Keith Johnson – Morgan Keegan

Welcome to the third quarter 2008 Universal Forest Products Incorporated earnings conference call. (Operator Instructions) I would now like to turn the call over to your host for today's call, Lynn Afendoulis.

Welcome to Universal Forest Products third quarter 2008 conference call. On the call today are Executive Chairman William C. Currie, CEO and President, Michael B. Glenn and CFO Michael Cole. Please be aware that statements included in this call that are not historical are forward looking statements within the meaning of Section 21E of the Securities Exchange Act of the 1934, as amended. Such forward looking statements are based on the belief of the company's management as well as on assumptions made by and information currently available to the company at the time such statements were made. The company does not undertake to update forward looking statements to reflect circumstances, assumptions or events that occur after the date the forward looking statements are made. Actual results could differ materially from those included in such forward looking statements. Investors are cautioned that all forward looking statements involve risk and uncertainty. Among the factors that could cause actual results to differ materially are the following: [Inaudible] lumber markets, competitive activity, negative economic trends, Government regulations and weather. These risk factors and additional information are included in the company’s reports on Forms 10-K and 10-Q on file with the Securities and Exchange Commission. This file is the property of Universal Forest Products any redistribution retransmission rebroadcast of this file in any form without the expressed written consent of Universal is strictly prohibited. At this point I would like to turn the call over to Bill Currie.

Thanks for joining us on this exciting conference call. This is not the kind of quarter that we like, or that we’re proud of, or that we’re used to. But if you take a look at our performance against the competitive landscape, Universal has outperformed its peers in spades. We’ve got a very solid balance sheet; we’re continuing to generate good positive cash flow. We’re growing our market share; we’re taking care of our key people and our customers. And we’re focused on all the right things that will get us through these turbulent times and will get us to new prosperity when the markets and economy start to heal. We missed our targets. The targets are no longer reliable when everything is crashing around you. There’s no way to provide accurate forecasts. We can only keep our nose to the grindstone and focus on the things that count. On our inventory, our receivables, our operating costs, our selling prices and other things that we can control, manage and impact. And that’s what Mike Glenn and his team have been doing. They’re doing all the right things to bring us through these tough times and to get us the strong operating profits and growth again in the future. Mike Glenn will run us through the business, but first I’ll ask Mike Cole to take us through the numbers, Mike.

I’ll get things started by reviewing our income statement for the quarter. As you noticed in the press release our total net sales for the quarter decreased by 10%. We estimate this was comprised of an 8% decrease in unit sales and a 2% decline in overall selling prices. Reviewing by market, our sales to DIY market decreased 6% compared to last year. Due to a 4% decline in unit sales as a result of the effect of the housing market on our customers whose business is closely correlated with single family starts, and a decline in consumer spending impacting our big box customers. Our sales to the manufactured housing market decreased 23% for the quarter, primarily due to a decrease in unit sales. HUD-code shipments were off 17% in July and August and Modular production was off 34%. Our sales to the site-built construction market decreased 24% this quarter due to an estimated 18% decrease in unit sales and a 6% decrease in average selling prices due to continued pricing pressure. By comparison single family housing starts were up approximately 39% for the period versus last year. In previous quarters we’ve been able to mitigate some of the challenges of the single family market on our volume by pursuing multi-family and light commercial business. Finally our sales to the industrial market increased by 5% for the quarter, primarily due to a 3% increase in unit sales and a 2% increase in average selling prices. Unit sales growth this quarter was a result of acquisitions and continuing to gain market share and add new customers including concrete forming. These increases are presently offset by unit sales decreases to existing customers due to weak economic conditions. Moving down the income statement our third quarter gross margin decreased to 10.7% from 12.1% last year. And our gross profit dollars decreased by 20.3%. The decline in profitability from last year was primarily due to ongoing pricing pressure, particularly on sales to the site-built market. Higher fuel and other transportation costs and the combined the fact of lower volumes and fixed manufacturing costs. General and administration expenses decreased by over $700,000 for the quarter, comprised of $1.6 million of SG&A of newly acquired operations. A $4.6 million reduction in SG&A for operations we’ve previously closed and an increase in the SG&A of existing locations totaling $2.3 million. The increase in existing locations was primarily due to an increase in bad debt expense of $2.2 million and an increased in accrued bonus of $1.1 million. Approximately $1 million of the increase in bad debt expense was due to an adjustment we recorded in the third quarter of 2007 as a result of a favorable ruling we received on a properties claim. The increase in bonus expense is due to an adjustment we recorded in the third quarter of 2007 to reduce our year to date bonus equivalent, we felt several of our profit centers would not achieve our minimum ROI hurdle to be eligible for bonus. These increases were offset somewhat by a decrease in wages and related costs, due to a reduction in head count and a decline in sales commissions. We incurred $6.2 million of asset impairments and other costs associated with idle facilities this quarter. The plants we closed had annual sales of approximately $45 million, an annual incremental and operating losses of over $6 million. Our effective tax rate is almost 44% for the year to date which resulted in tax expense for the quarter despite recording a book loss. This is primarily due to the impact of non-deductible permanent tax differences and the fact that the Federal Research and Development tax credit was not granted legislative approval until October of 2008. We currently estimate that the annual amount of this credit will fall to $1.2 million and will be recorded in the fourth quarter. Moving on to our cash flow statement, our cash flow from operations was $33 million for the first nine months of 2008. Our net earnings of $5.1 million, included $44 million in non-cash expenses which were offset by a $16 million increase in working capital since year end. The primary reason for the increase in working capital was an increase in accounts receivable due to the cancellation of our sales receivables program at the end of September. If we were to present our operating cash flows excluding the effect of the sale of receivables program for the first nine months of 2008 and 2007 those cash flows would have been approximately $60 million and $57 million respectively. We continue to curtail capital expenditures which decreased to $14 million for the year so far. We currently anticipate total CapEx of approximately $20 million for the year. And during the first three quarters we completed the sale of all the real estate and equipment totaling over $30 million. The book value of other real estate we have classified as up for sale on our balance sheet, totals approximately $12 million at the end of September. We’ve repaid almost $39 million of debt for the year so far, plus $27 million effective canceling of our parts program, our sales receivables program. And we continue to anticipate significant cash flow for the balance of the year when combined and will combine with the capacity we have on our revolving credit facility, expect to pay off the notes that are maturing in December of 2008 totaling $78.5 million. Couple of points I’d like to make about the balance sheet. Our total interest bearing debt at the end of third quarter decreased to $167 million from $206 million last December and $249 million at the end of last September. Excluding the impact of our sales receivables program on our debt we would have had $249 million last September and $233 million last December, which demonstrates the amount of cash flow we’ve generated over the last several months and used to pay down debt. Included in the long term debt there was $17.7 million outstanding on our five year credit facility which has a remaining availability of $252 million after considering the amount outstanding and amounts reserved for letters of credit. Today the amount outstanding on our revolver is approximately $6 million. That completes my comments on the financial statements.

I’ll turn it over to Mike Glenn for a business review and an outlook, Mikey.

Before I talk about the quarter, I want to say how excited I am about the announcement we made this morning. Since becoming CEO I have been weighing our opportunities for president of the company and Pat Webster has been the clear choice. Pat has been with Universal for 24 years. He’s done it all here and he’s done it well. From sales to purchasing to operations he’s had a great career of success. He’s a strong leader, and a consensus builder. A good communicator and is and he has the respect everyone in the industry and the company. And I’m pleased that he will be our new Chief Operating Officer. And when I called Dick Frazier the best lumberman in the company, I’m not saying what I believe I’m saying what everyone thinks. There is no one who commands more respect than Dick. Dick is one of the most successful leaders in our company’s history. And he knows how to make money and he does it wherever he goes. So I’m excited, both of these guys will be taking reporting new positions at Universal and be critical players for our future. Our business isn’t quite as exciting. Call it what you want the devastating global economy the financial market in ruins, a credit mess. I wasn’t even alive in 1928 but I can imagine what it was like. And these are unprecedented times and they are creating unprecedented challenges for American business including us at Universal. You saw our numbers, they’re nothing to be happy about and they’re nothing like the numbers we're used to. They don't get our people the bonuses they worked so hard for and they don’t move the needle on the growth monitor. But they do give us reasons to be proud of what we’ve been able to do in these challenging times. As I’ve noted to our employees here, our operations that are devoted solely to the site-build business have cost us over $30 million in losses this year as of September. If you remove our site-build, our performance has been respectable, especially in times like these. And that’s because we’re doing the right things. Like Bill said, we’re focused on our balance sheet and growing market share and taking care of those who rely on us, our people and our customers. And we’re doing what we need to do to make Universal a strong company for them, for our shareholders and for all our stakeholders. I believe that’s why we started to see improvements in our margins in the last three to four weeks, because we’re working on cutting costs, on pricing our products right on receivables and inventory. In fact in some instances our field operations have been so intent by maintaining low inventories that they got too lean. So we’re working with them to get a little bit better balance to make sure that they keep their inventories in lines with their needs. But they’re also flexible enough to take advantage of any good purchasing opportunities that come their way. We’re starting to see more and more competitors cut back their operations or close. And that’s going to get us opportunities for additional business. Here’s a look at our markets. In DIY we’re focused on margins, we’re adding new products with existing customers and we are gaining market share. Some of that will happen as players exit the market, some will happen because we have a rare ability to deliver mixed truckloads to fill multiple needs. And some of that share is coming because we offer the best products and services in the market place. And I wish you could have been in Houston and Galveston the morning after the hurricane struck. The night before a dozen or so of Universal employees from places as far away as Atlanta and Missouri, traveled to Houston to be on the ground so they could help as soon as the storm passed. And that’s what we did. They went to our customers locations they helped them open their doors. Because their employees were too busy taking care of their own families and property. So Universal employees loaded generators, we mopped floors, and we did whatever we could to help them out. And they did it on their own. I didn’t have to ask them, their managers didn’t have to tell them they needed to fly into a storm zone. They did it because that’s what we do. We keep our customers at heart. And by the way when our people arrived in Houston the storm had knocked out the power in most areas and the hotel was damaged and closed. So they slept on floors at the homes of Universal employees, not one night or two, but night after night. And those homes didn’t have power either. That tells you a little bit about Universal’s customer service. And also about the camaraderie you’ll find at Universal. It’s a special thing. And it’s one of the reasons we’re surviving in these challenging times with great spirit and determination. As we noted in our press release our sales to big box customers were flat to up in the market. Our overall decline in this market was mostly because of a drop in business where our independent retail customers whose business is mostly tied to housing. In industrial we’re doing less with existing customer because they’re manufacturing less. People are putting off the purchase of new lawn mowers or new mattresses, which means we’re building fewer bed frames and lawnmower crates. So our strategy is to add more customers. More accounts, less sales per account as Doug Honholt, our Vice President of Industrial Sales like to say. We continue to add new customers in our core industrial business and in concrete forming, which we got into earlier this year. Concrete forming is what industrial was in 2000, a wide open area with lots of promise. And we’re seeing solid early promise from national companies looking for a supplier that can meet their needs throughout the country. We’re supplying construction companies that are working on everything from botanical gardens to highway bridges. We added 110 new concrete forming accounts this year. And we now have 22 account managers going after concrete forming business out of 20 Universal plants. It’s one way we’re building our business in the down economy. We’re also looking to expand our industrial operations into markets where we currently have no presence, markets like Seattle and the Plain States. Site-build there just isn’t a lot to say. We stay focused on making sure that we’re right sized to the markets and our opportunities. Sometimes that means closing plants that are losing money. Sometimes you keep an unprofitable plant open because you’re willing to take a small loss in order to stay in a market or to keep up a particular customer. Our strategy is different location by location, by location and region, but we continually evaluate and weigh our operations about the short term and long term opportunities. We’re looking for new opportunities in multi-family and light commercial and in government projects. And we’re taking business only that has acceptable margin. If the competition wants to cut prices below cost, that’s their game. It isn’t ours and we’re walking way from it, because nothing good can come from it. In Manufactured Housing we’re hanging onto a dominant market share and we’re serving our customers as best we can so they can have a fighting chance to survive these tough times. Some of our customers operating on half capacity some are becoming credit concerns. And we’re taking measures to minimize our risk. But the bottom line is, this industry is on the endangered species list, while all of these things are important maybe the most important things I hope you take away from this release and this call are. Number one as I said earlier our business today can be described as more customers, less sales per customer. In some markets we’re adding new customers, but customers still aren’t doing the volume they were doing before the economy crashed. So we have to add more of them, more customers, less sales per customers. Number two, we have a solid balance sheet and a strong cash flow. If we see opportunities, if there’s good acquisition potential or chance to green field and operation in an important market we have the means to do it. And number three and most important, Universal’s people are the best and the most productive workers I can imagine. We’ve had to cut and do more with fewer people and resources. And there’s been no complaining no sulking. There’s been a realization that we have to work shoulder to shoulder to succeed and make sure that we’re a strong survivor in each of our markets. These are unbelievably challenging times and we’re just getting into the tough winter months. But I believe we’re doing all the right things, to remain solid and to be well positioned when a stronger economy returns.

Mike and his team are doing a very good job leading and managing this company through the toughest times imaginable. They’re making the tough decisions that are critical in the current climate and for the future of Universal and we’re very proud, even the meager results we have we’re very proud of them considering where everybody else is in this business. So now I’ll open up the conference call for questions.

Your first question comes from Steve Chercover – D. A. Davidson & Co. Steve Chercover – D. A. Davidson & Co.: My first question did the impairments that you took in the quarter include much in the way of severance and if so how much will you save on the run rate going forward?

Of the $6.2 million charge $5.6 million was asset impairment $600,000 was severance. In terms of savings going forward I’d say about $1 million to $1.5 million a month. Steve Chercover – D. A. Davidson & Co.: $1 million to $1.5 million per month?

Correct. Steve Chercover – D. A. Davidson & Co.: And can you discuss trends in October as compared to September or third quarter?

It’s pretty early to say, Steve, just too soon to -- Steve, I think it’s the one thing we can tell you is that we are holding from a sales standpoint but the encouraging thing is that about six weeks ago, we really, really put a push on margins. And we are seeing in the last three weeks that our margins have moved up to a level that is starting to become acceptable. Steve Chercover – D. A. Davidson & Co.: And you said you’re establishing your first ever facility in Seattle did I understand that correctly? William G. Currie: Well what we said was there are some markets where we know we need to go, one we believe is Seattle and another one is in the Plain States. We haven’t broke ground we’re starting to do some research. Steve Chercover – D.A. Davidson & Co.: And final question, you indicated that you had the balance sheet, and we always know that you have the desire to grow. Is it best at this stage to go green field or, I mean, certainly I can’t imagine being aggressively picking off competitors, but maybe just having the presence there and picking at the carcasses or, you know, having customers come to you when their pre-existing suppliers go away. How do you think of it?

Steve, there will be a time to do exactly what you said, to pick at the carcasses, but we’re not there yet. This is, there’s going to be some opportunities over the, you know, over the next year or two, to make substantial moves with people that are in serious financial trouble. We’ve seen, well you’ve seen some of the big ones too, you follow them all. I mean they’re a mess and they haven’t watched their balance sheets and they’re not operating with positive cash flow. And they’re going to be very easy to acquire but the time isn’t right now, it’s too uncertain.

Your next question comes from Jay McCanless – FTN Midwest Securities Corp Jay McCanless – FTN Midwest Securities Corp.: I want to talk a little bit more about the balance sheet specifically on the credit facility. I wanted to make sure the covenants we still need to watch for are 60% leverage, 2.5 times interest coverage. And also just wanted to find out on the net worth test I believe it’s $265 million and is that a tangible net worth test?

It’s a GAAP net worth test. Jay McCanless – FTN Midwest Securities Corp.: Okay but the other covenant?

That is correct you have all those figures correct. The third covenant though is the, those are all the bank covenants, the note holders have an additional covenant which is a fixed charge coverage which is EBIT R the R is rent divided by interest and rent and that is set at 1.75 comps. Jay McCanless – FTN Midwest Securities Corp.: And as —

Now one thing I think I should probably add to that is trying to, it would be difficult for you to calculate that from the consolidated financial statements, because some of our subsidiaries who I will refer to as unrestricted subsidiaries under the documents. And are excluded from those calculations. So some of the unrestricted subsidiaries are lost subsidiaries and won’t be in the, aren’t in the covenant calculation. Jay McCanless – FTN Midwest Securities Corp.: Okay at the third quarter how did you stand relative to these covenants?

We are in compliance with all of our covenants. Jay McCanless – FTN Midwest Securities Corp.: The next question I have is on the goodwill, I believe the goodwill balance is somewhere around $150 million, do you expect further asset impairments going forward, how much of that balance do you believe you might have to write down?

We haven’t impaired any goodwill or, to date. The impairments we’ve taken have generally been on real estate and mostly actually equipment for, Site-build equipment that we provide for our facilities. We will be evaluating our, we haven’t had a triggering event to require an analysis of goodwill yet. So we will go through our fourth quarter detailed calculation and future cash flow analysis and we’ll do announcements at that time and see how that shapes out in the fourth quarter. Jay McCanless – FTN Securities Corp.: And then my last question.

As a reminder though, Jay, is that a future cash flow analysis too. So, you know, you’re going through, you know, a period of earnings, you know, when you do that calculation you’re looking at into the future. Jay McCanless - FTN Securities Corp.: My last question with the, I don’t know if you can call it price war but with Depot and Lowe's both lowering prices on certain starter items which I think overlap very well with what Universal Forest Product sells them. What has been the status of price negotiations with them lately are they pushing harder for lower prices, can you just give a sense of how things are going in DIY?

Jay, most of our pricing that we do, that we do with those companies is a fixed pricing based on the market. So they may drop their prices on a retail level but our prices to them have been set for a period of time. They have not come back to us and asked us to drop our prices. Jay McCanless – FTN Securities Corp.: And when do those negotiations restart I’m assuming it’s an annual or six months?

Yes there are different times for each different category we’re in but we are just starting the negotiations on our pressure treated and fencing and probably half our business we’re starting negotiations right now. In fact after this call I’m leaving for Atlanta. Jay McCanless – FTN Securities Corp.: And I did have one other I wanted to ask. The notes that are due in December I believe you said you’re going to pay those with a combination of cash flow on hand and then also the revolver. Can you state again how much is left on the revolver or how much is open on the revolver right now?

The revolver currently has a balance of about $6 million and we have about $30 I think in amounts reserved for letters to credit and it’s a $300 million revolver. Jay McCanless – FTN Securities Corp.: So about $250.

$250, $260 million.

Your next question comes from Keith Johnson – Morgan Keegan Keith Johnson – Morgan Keegan: Just a couple of questions I guess kind of starting off with just trends in the quarter. As you kind of came through the third quarter did they get markedly more difficult or were they fairly stable or what did you guys see?

I think the biggest thing we face in the quarter was margin erosion and a decline in sales. The one thing that was really disappointing was the Site-build continued to drop, even at a rate faster than we anticipated and a market that we thought couldn’t go any further which was manufactured housing, had double digit decreases again. And those were the ones that really were impactful in the market. Keith Johnson – Morgan Keegan: On the Site-build side was that more the single family erosion there or was it multi family, light commercial beginning to slow?

Yes most of it was single family, we had some multi-family that projects were committed that they ran into you know what, they had a problem getting financing. Keith Johnson – Morgan Keegan: How about on the light commercial side in that channel?

We didn’t have a major problem in the quarter with light commercial. Keith Johnson – Morgan Keegan: When you made the comment a little bit earlier that you’re beginning to see improvement over the last several weeks in your margins, with the, I guess the increased focus there. All we can see of course is the average margin, I guess gross margin for the quarter which is around 10.7%. So I was just trying to gauge, kind of, how much of a margin improvement, are we seeing numbers back above that 10.7% or did it get a lot worse than that and now it’s starting to get back up?

We’re seeing the margins north of 10.7%. Keith Johnson – Morgan Keegan: I understand there’s a lot of uncertainty, particularly with the financial situations etcetera in the market, but, you know, last year in the fourth quarter it was very challenging market conditions. If you were to look at this year’s fourth quarter, how would you, kind of, characterize the change in market conditions year over year?

Well ,we made some major moves last quarter and we feel that this fourth quarter that we’re going to we think we’ll beat last year’s fourth quarter. Keith Johnson – Morgan Keegan: And I understand there’s a lot of uncertainty around that. And I guess this one quick final question. You did make a comment about how much of an impact the closed business is, I guess have had, you know, on the bottom line, is there a way, I mean, could you give me an idea of where those business were and maybe the high point and how well they were performing versus where they are now? I have it in my notes.

You talking about the operations before close this year, the incremental operating loss is about $6 million. Where were they at their peak? Keith Johnson – Morgan Keegan: Yes where, how much of an impact have you had, you know, just kind of, from where those businesses would have been operating to where they are today?

That’s a tough one to answer.

I don’t have that in front of me, Keith, sorry.

At this time there are no further questions in the queue. I would now like to turn the call back over to Mr. Bill Currie for closing remarks.

Well thank you all once again for taking time to listen to our story in these very uncertain times. You know we’re, you know we’re on it. And every single important key indicator in our business is being analyzed daily by our management team. And we promise you that we’ll inform our peers and we will end up being as we always have been a good solid investment for you. So thank you for your time and we got to get back to work.